Charlotte | Manufacturers, producers or importers that sell or use any of these chemicals must pay a tax of $0.22 to $4.87 per ton, depending on the chemical. . The full list of taxed chemicals and substances can be viewed here. All rights reserved. What is a taxable chemical? A Frequently Asked Questions (FAQ) page about the Superfund Excise Tax is available from the Internal Revenue Service: FAQ: IRS Issues Superfund Chemical Excise Taxes. Second, an importer or exporter of a substance (or other interested person) can petition the Secretary to add the substance to or remove the substance from the list of taxable substances. The Inflation Reduction Act (Pub.L. However, given the related compliance processes that need to be established (e.g., automating data capture, gathering exemption documentation, and return preparation and filing) and matters that need to be addressed (e.g, Form 637 registration and taxable substance listing), taxpayers should consider taking this opportunity to evaluate whether their overall SCET program is sufficiently robust and meets the greater needs of their organization for example, by reprioritizing activities within their project plans. Under certain state laws the following statements may be required on this website and we have included them in order to be in full compliance with these rules. The Inflation Reduction Act (Pub.L. Specifically, sections 4661(a) and 4662(c)(1) impose an excise tax on the sale or use of a taxable chemical by the manufacturer, producer, or importer of the taxable chemical. The IRS recently issued FAQs and published tax rates for 121 of the 151 taxable substances. Its tax re-imagined. For exporters, IRC 4662(e) provides for a refund of the Superfund Tax for both taxable chemicals and taxable substances that are exported. Taxable Chemicals. Tax credits abound. The Infrastructure Investment and Jobs Act (Pub.L. Semi-monthly deposits are required, however. BDO USA, LLP, a Delaware limited liability partnership, is the U.S. member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. There is some ambiguity in the calculation of the tax on substances, but IRS Notice 2021-66 suggests that the default tax calculation will be 10 percent of the assessed import value. (added June 24, 2022), Q4. Part II of IRS Form 6627 has been updated to reflect these rates. Since its reinstatement, the excise tax has raised many questions and caused significant industry consternation. Florida Woman Sentenced to Prison for False Statement to Investigator Idaho Man Indicted for Federal Hate Crime Against LGBTQ Residents of EPA Proposes Cleanup Plan for Sulphur Bank Mercury Mine Superfund B&C Biobased and Sustainable Chemicals Practice Group Bergeson & Campbell, P.C. Notice IR-2022-132 focused on issuing tax rates for 121 taxable substances. (added June 24, 2022), Q14. The Superfund chemical taxes will be reported on Form 720, Quarterly Federal Excise Tax Return, and Form 6627, Environmental Taxes. These FAQs detail what the Superfund chemical excise tax is, how the tax is computed, and who may be liable for the tax. If the importer does not calculate the section 4671 tax for a taxable substance and the IRS has not prescribed a tax rate for the taxable substance, then the amount of tax is 10 percent of the appraised value of the taxable substance as of the time the taxable substance was entered into the United States for consumption, use, or warehousing. As a result, Notice 2022-15 provides welcome relief and affords SCET taxpayers additional time to perfect their SCET deposit process. The IRS is expected to issue guidance prior to theJuly 1, 2022, effective date of the Superfund excise taxes. After a more than 26 year hiatus, on July 1, 2022, the Superfund chemical excise tax (the Superfund Chemical Tax) will again become effective. Permit & License. This new tax does not need to add additional costs to your products. | All Locations, Cherry Bekaert is the brand name under which Cherry Bekaert LLP and Cherry Bekaert Advisory LLC, independently owned entities, provide professional services in an alternative practice structure in accordance with applicable professional standards. The information contained herein is not intended to be written advice concerning one or more Federal tax matters subject to the requirements of section 10.37(a)(2) of Treasury Department Circular 230. Currently, there are 42 taxable chemicals, each with a specified tax rate imposed on a per-ton basis, and 151 taxable substances for which the tax rate is dependent on the substances unique chemical composition. The table below outlines products that are impacted by this excise tax. This field is for validation purposes and should be left unchanged. Learn more about Superfund Excise Tax changes effective July 1, 2022, including key considerations for dealings with the reinstated Superfund Tax on chemicals and substances. The Infrastructure Investment and Jobs Act signed into law November 15, 2021, reinstated the Superfund Excise Taxes (Superfund Tax) on chemicals and substances. Various exemptions exist for taxable chemicals. How do I calculate the section 4671 tax? A3. The term substance, therefore, excluded fabricated products that are molded, formed, woven, or otherwise finished into end-use products. The Superfund Chemicals Excise Tax Makes a Comeback. See section 4671(b)(3). The content and links on www.NatLawReview.comare intended for general information purposes only. Substances treated as taxable will significantly increase over the pre-1996 levels, when the threshold determination only applied when more than 50% of the substances weight or value consisted of taxable chemicals. The Superfund chemical excise taxes are reported on Form 6627, Environmental Taxes, which is attached to Form 720, Quarterly Federal Excise Tax Return. Some exported chemicals and hazardous substances used in different types of fertilizer, animal feed, and fuel are exempt from the superfund tax. IRC section 4661(b) lists 42 chemicals that are once again subject to the Superfund Excise Tax effective July 1, 2022. In addition, exporters of chemicals and substances which were subject to the Superfund Tax can request a refund of the tax previously paid. Section 80201 of the IIJA reinstates the Superfund excise tax on certain chemical substances under Sections4661and4671of the Internal Revenue Code (Tax Code), effectiveJuly 1, 2022. The information contained herein is of a general nature and based on authorities that are subject to change. Webrate and the $0.164 per barrel petroleum Superfund tax rate. Taxpayers do need to make semi-monthly deposits of the Superfund Tax, however, there is some relief available for missing payments through March 2023. $150 plus $0.069 per each acre-foot greater than 10 acre-feet. Unlike many filings, due dates for deposits are accelerated if the typical due date falls on a Saturday, Sunday, or a legal holiday in the District of Columbia. Taxpayers must make semimonthly deposits of the Superfund chemical excise taxes. During her free time Elizabeth enjoys going to concerts, traveling, hanging out with her pets, and caring for her succulent plants. The Superfund taxes are expected to generate approximately $14.5 billion over a 10-year period. Augusta | I am an importer of taxable substances. The Infrastructure Investment and Jobs Act signed into law November 15, 2021, reinstated the Superfund Excise Taxes (Superfund Tax) on chemicals and substances. As we mentioned above, this tax is only for companies importing chemicals or hazardous substances on the list and filing an IRS Form 720. More. They were reinstated by section 80201(c)(3) of the Infrastructure Investment and Jobs Act (Public Law 117-58, 135 Stat. July 1, 2021 thru June 30, 2022. Any manufacturer, producer, or importer of a taxable chemical is subject to the superfund excise tax. Cherry Bekaert: Tax, Audit and Advisory Services, Superfund Excise Taxes on Chemicals and Substances: How to Prepare, Starting a New Business & Launching Successfully: Tax and Business Planning Tips, IRS Rev. These credits are accrued when a taxable chemical or taxable substance is exported. While the final taxable substance list and exact rates have yet to be finalized, costs will be calculated by weight or value of the contained taxable chemical. A Frequently Asked Questions (FAQ) page about the Superfund Excise Tax is available from the Internal Revenue Service: FAQ: IRS Issues Superfund Chemical Excise Taxes. This excise tax, which is imposed on certain chemicals and imported chemical substances, was reinstated effective July 1, 2022, as part of the Infrastructure Investment and Jobs Act of November 2021. Mississippi Gaming Commission Agenda: January 19 Meeting. The Chemicals Superfund Tax and the Hazardous Substances Tax took effect on July 1, 2022 with a ten This will result in six deposits being made per quarter (special rules apply in September). These Superfund tax credits can be taken by either the importer, the manufacturer, or the exporter, depending on the commercial agreements that have been established among those parties. As reinstated, the Superfund excise tax will apply to a list of taxable chemicals and taxable substances, as ofJuly 1, 2022,throughDecember 31, 2031, if not extended. Please see www.pwc.com/structure for further details. Managing Licenses, Careers The Reinstated Superfund Excise Taxes. Chicago | You will also have to determine how your company will pass on the tax to your customers. Class Action Year in Review: The Rise Of The Self-Tapping Website? The Infrastructure Bill reinstated the Superfund Excise Taxes on chemicals and taxable substances, effective July 1, 2022. By continuing to use this site, you are giving consent to cookies being used. This approach includes: Let us help you address the compliance issues associated with reinstatement of Superfund chemical excise taxes. However, Notice 2022-15, 2022-18 I.R.B. If your company is a business that manufactures, produces or imports any of the listed chemicals or substances, determine your liability for the taxes. 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